In this podcast episode, Professor Hendrik Bessembinder shares compelling insights from his research on stock market performance. He reveals that a mere 4% of companies have generated all net shareholder returns since 1926. Bessembinder discusses the negative average returns of individual stocks, the skewness of returns, and the significant losses taken by even the best performers. He highlights the difficulties of stock picking compared to the advantages of a passive investment approach. The episode also emphasizes the importance of fundamental growth metrics and the pervasive nature of skewness in global markets, offering listeners a fresh perspective on investing strategies and market dynamics.
